EXHIBIT 10.15
THE
ANNTAYLOR STORES CORPORATION
1992 STOCK OPTION AND RESTRICTED
STOCK AND UNIT AWARD PLAN
Amended and Restated as of February 23, 1994
===============================================================
Table of Contents
Section Page
1. Purpose . . . . . . . . . . . . . . . . . . . 1
2. Definitions . . . . . . . . . . . . . . . . 1
3. Administration . . . . . . . . . . . . . . . 3
4. Eligibility . . . . . . . . . . . . . . . . . 4
5. Stock . . . . . . . . . . . . . . . . . . . . 5
6. Terms and Conditions of Options . . . . . . . 5
7. Terms and Conditions of Restricted Stock
Awards and Restricted Unit Awards . . . . . 10
8. Agreement of Grantee Regarding Withholding
Taxes . . . . . . . . . . . . . . . . . . . 12
9. Term of Plan . . . . . . . . . . . . . . . . 13
10. Amendment and Termination of the Plan . . . . 13
11 Approval of Stockholders . . . . . . . . . . 13
12 Miscellaneous . . . . . . . . . . . . . . . . 14
(ii)
=============================================================
List of Defined Terms
Term Section
Acceleration Event . . . . . . . . . . . . 6(i)(2)
Board . . . . . . . . . . . . . . . . . . . 3
Cause . . . . . . . . . . . . . . . . . . . 2
Code . . . . . . . . . . . . . . . . . . . 1
Committee . . . . . . . . . . . . . . . . . 3
Common Stock . . . . . . . . . . . . . . . 2
Corporation . . . . . . . . . . . . . . . . 1
Disability . . . . . . . . . . . . . . . . 2
Exchange Act . . . . . . . . . . . . . . . 3
Executive Officers. . . . . . . . . . . . . 3
Fair Market Value . . . . . . . . . . . . . 2
Grantee. . . . . . . . . . . . . . . . . . 2
Grants. . . . . . . . . . . . . . . . . . . 3
Incentive Stock Option . . . . . . . . . . 1
Maximum Liability. . . . . . . . . . . . . 8
Nonqualified Stock Options . . . . . . . . 1
Option Agreements . . . . . . . . . . . . . 3
Option Price. . . . . . . . . . . . . . . . 3
Optionee . . . . . . . . . . . . . . . . . 4
Option . . . . . . . . . . . . . . . . . . 2
Plan . . . . . . . . . . . . . . . . . . . 1
Restricted Award Agreement . . . . . . . . 3
Restricted Period . . . . . . . . . . . . . 7(b)
Restricted Share . . . . . . . . . . . . . 2
Restricted Stock Award . . . . . . . . . . 3
Restricted Unit . . . . . . . . . . . . . . 2
Restricted Unit Award . . . . . . . . . . . 3
Rule 16b-3 . . . . . . . . . . . . . . . . 3
Subsidiary Corporation . . . . . . . . . . 2
(iii)
=============================================================
THE ANNTAYLOR STORES CORPORATION
1992 STOCK OPTION
AND RESTRICTED STOCK AND UNIT AWARD PLAN
Amended and Restated as of February 23, 1994
1. Purpose.
--------
This 1992 Stock Option and Restricted Stock and Unit
Award Plan, as amended and restated as of February 23, 1994
(the "Plan"), is intended to encourage stock ownership by
employees of AnnTaylor Stores Corporation (the "Corporation"),
its divisions and Subsidiary Corporations, so that they may
acquire or increase their proprietary interest in the
Corporation, and to encourage such employees to remain in
the employ of the Corporation, its divisions and Subsidiary
Corporations, and to put forth maximum efforts for the success
of the business. It is further intended that no Option
granted pursuant to this Plan shall constitute an "incentive
stock option" ("Incentive Stock Option") within the meaning
of Section 422 of the Internal Revenue Code of 1986, as
amended ("Code"), and all Options so granted shall
constitute "nonqualified stock options" ("Nonqualified Stock
Options").
2. Definitions.
------------
As used in this Plan, the following words and phrases
shall have the meanings indicated:
(a) "CAUSE" used in connection with the termination
of employment of a Grantee shall mean a termination of
employment of the Grantee by the Corporation or a division
or Subsidiary Corporation due to (i) the failure to render
services to the employer corporation in accordance with the
terms of such Grantee's employment, which failure amounts to
a material neglect of such Grantee's duties to the employer
corporation, (ii) the commission by the Grantee of an act of
fraud, misappropriation (including the unauthorized
disclosure of confidential or proprietary information) or
embezzlement, or (iii) a conviction of or guilty plea or
confession to any felony.
(b) "COMMON STOCK" shall mean shares of the
Corporation's Common Stock, par value $.0068 per share.
(c) "DISABILITY" shall mean a Grantee's inability
to engage in any substantial gainful activity by reason of
any medically determinable physical or mental impairment
that can be expected to result in death or that has lasted
or can be expected to last for a continuous period of not
less than twelve (12) months.
================================================================
(d) "FAIR MARKET VALUE" per share as of a particular
date shall mean (i) the closing sales price per share
of Common Stock as reported on the New York Stock Exchange
(or if the shares of Common Stock are not then traded on
such exchange, on the principal national securities exchange
on which they are then traded) for the last preceding date
on which there was a sale of such Common Stock on such
exchange, or (ii) if the shares of Common Stock are not then
traded on a national securities exchange but are traded on
an over-the-counter market, the average of the closing bid
and asked prices for the shares of Common Stock in such over-
the-counter market for the last preceding date on which
there was a sale of such Common Stock in such market, or
(iii) if the shares of Common Stock are not then listed on a
national securities exchange or traded in an over-the-counter
market, such value as the Committee in its discretion
may determine.
(e) "GRANTEE" shall mean a person to whom an
Option, Restricted Stock Award or Restricted Unit Award has
been granted.
(f) "OPTION" shall mean the right, granted to a
Grantee pursuant to Section 3, to purchase a specified
number of shares of Common Stock, on the terms and subject
to the restrictions set forth in this Plan and by the
Committee upon the grant of the Option to the Grantee.
(g) "RESTRICTED SHARE" shall mean a share of
Common Stock, awarded to a Grantee pursuant to Section 3,
that is subject to the terms and restrictions set forth in
this Plan and by the Committee upon the award of the
Restricted Share to the Grantee.
(h) "RESTRICTED UNIT" shall mean the right,
awarded to a Grantee pursuant to Section 3, to receive an
amount in cash equal to the Fair Market Value of one share
of Common Stock, on the terms and subject to the
restrictions set forth in this Plan and by the Committee
upon the award of the Restricted Unit to the Grantee.
(i) "SUBSIDIARY CORPORATION" shall mean any
corporation (other than the Corporation) in an unbroken chain
of corporations beginning with the employer corporation if,
at the time of granting an Option, Restricted Stock Award or
Restricted Unit Award, each of the corporations other than
the last corporation in the unbroken chain owns stock
possessing fifty percent (50%) or more of the total combined
voting power of all classes of stock in one of the other
corporations in such chain.
-2-
=======================================================================
3. Administration.
--------------
The Plan shall be administered by the Compensation Committee
(the "Committee") of the Board of Directors of the
Corporation (the "Board"). The Committee shall consist of
two or more persons, each member of the Committee shall be a
member of the Board, and at least two members of the
Committee shall be both "outside directors" within the
meaning of section 162(m) of the Code and "disinterested
persons" within the meaning of Rule 16b-3, as from time to
time amended ("Rule 16b-3"), promulgated under Section 16 of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
The Committee shall have the authority in its
discretion, subject to and not inconsistent with the express
provisions of the Plan, to administer the Plan and to
exercise all the powers and authorities either specifically
granted to it under the Plan or necessary or advisable in
the administration of the Plan, including, without limitation,
the authority to grant Options and make awards of
Restricted Shares and Restricted Units ("Restricted Stock
Awards" and "Restricted Unit Awards", respectively, and
sometimes collectively with the grant of Options, "Grants");
to determine the purchase price of the shares of Common Stock
covered by each Option (the "Option Price"); to determine
the persons to whom, and the time or times at which,
Options, Restricted Stock Awards and Restricted Unit Awards
shall be granted; to determine the number of shares to be
covered by each Option, and to determine the number of
Restricted Shares and Restricted Units to be covered by each
Restricted Stock Award and Restricted Unit Award; to interpret
the Plan; to prescribe, amend and rescind rules and
regulations relating to the Plan; to determine the terms and
provisions of the agreements (which need not be identical)
entered into in connection with grants of Options ("Option
Agreements") and Restricted Stock Awards and Restricted Unit
Awards ("Restricted Award Agreements"); and to make all
other determinations deemed necessary or advisable for the
administration of the Plan.
The determinations of the Committee shall be binding
and conclusive on all parties. The Committee may delegate
to one or more of its members or to one or more agents such
administrative duties as it may deem advisable, and the
Committee or any person to whom it has delegated duties
as aforesaid may employ one or more persons to render advice
with respect to any responsibility the Committee or such
person may have under the Plan.
-3-
=================================================================
The Board shall fill all vacancies, however caused, in
the Committee. The Board may from time to time appoint
additional members to the Committee, and may at any time
remove one or more Committee members and substitute others.
One member of the Committee shall be selected by the Board
as chairman. The Committee shall hold its meetings at such
times and places as it shall deem advisable. All
determinations of the Committee shall be made by a majority
of its members either present in person or participating by
conference telephone at any meeting or by written consent,
except that, with respect to Grantees who are executive officers
of the Corporation within the meaning of Rule 3-b7
promulgated under Section 3 of the Exchange Act ("Executive
Officers"), all action of the Committee shall be taken solely
by those members of the Committee who are "outside directors"
and "disinterested persons" as defined above, even if
less than a majority of the Committee. The Committee may
appoint a secretary and make such rules and regulations for
the conduct of its business as it shall deem advisable, and
shall keep minutes of its meetings.
No member of the Board or Committee shall be liable for
any action taken or determination made in good faith with
respect to the Plan or any Grant made hereunder.
4. Eligibility.
------------
Options, Restricted Stock Awards and Restricted Unit
Awards may be granted to employees (including, without
limitation, officers who are employees) of the Corporation
or its present or future divisions and Subsidiary
Corporations. In determining the persons to whom Options,
Restricted Stock Awards and Restricted Unit Awards shall be
granted and the number of shares to be covered by each
Option, and the number of Restricted Shares and Restricted
Units to be covered by each Restricted Stock Award and
Restricted Unit Award, the Committee shall take into account
the duties of the respective persons, their present and
potential contributions to the success of the Corporation
and such other factors as the Committee shall deem relevant
in connection with accomplishing the purpose of the Plan. A
person to whom an Option has been granted hereunder is
sometimes referred to herein as an "Optionee".
A Grantee shall be eligible to receive more than one
Grant during the term of the Plan, but only on the terms and
subject to the restrictions hereinafter set forth.
-4-
===============================================================
5. Stock.
-----
The shares of Common Stock subject to Options and
Restricted Stock Awards hereunder may, in whole or in part,
be authorized but unissued shares or shares that shall have
been or may be reacquired by the Corporation. The aggregate
number of shares of Common Stock as to which Options may be
granted from time to time under this Plan shall not exceed
1,600,000, and the number of shares of Common Stock as to
which Restricted Stock Awards may be granted from time to
time hereunder shall not exceed 67,000. The aggregate
number of Restricted Units that may be awarded from time to
time under the Plan shall not exceed 33,000. The limitations
established by the preceding sentences shall be subject to
adjustment as provided in Section 6(i) hereof. Effective as
of January 1, 1994, no more than 50% of the Options granted
in any fiscal year hereunder may be granted to any single
Executive Officer.
If any shares subject to an Option Grant or Restricted
Stock Award are forfeited, canceled, exchanged or
surrendered or if a Grant otherwise terminates or expires
without a distribution of shares to the Grantee, the shares
of Common Stock with respect to such Grant shall, to the
extent of any such forfeiture, cancellation, exchange,
surrender, termination or expiration, again be available for
Grants under the Plan; provided, however, that, to the
extent required for the Plan to comply with Rule 16b-3, in
the case of forfeiture, cancellation, exchange or surrender
of Restricted Shares subject to a Restricted Stock Award,
the number of shares with respect to such Award shall not be
available for Grants hereunder unless any dividends paid on
such shares are also forfeited, canceled, exchanged or
surrendered. If any Restricted Units are forfeited,
canceled, exchanged or surrendered or if a Restricted Unit
Award otherwise terminates or expires without any payment
being required to be made with respect to any of the
Restricted Units subject thereto, then such Restricted Units
shall, to the extent of any such forfeiture, cancellation,
exchange, surrender, termination or expiration, again be
available for Grants under the Plan.
6. Terms and Conditions of Options.
-------------------------------
Each Option granted pursuant to the Plan shall be
evidenced by a written Option Agreement between the Corporation
and the Optionee, which agreement shall comply with and be
subject to the following terms and conditions (and with such
other terms and conditions not inconsistent with the terms
of this Plan as the Committee, in its discretion, shall
establish):
(a) NUMBER OF SHARES. Each Option Agreement
shall state the number of shares of Common Stock to which
the Option relates.
-5-
========================================================================
(b) TYPE OF OPTION. Each Option Agreement shall
specifically state that no portion of the Option constitutes
an Incentive Stock Option and the entire Option constitutes
a Nonqualified Stock Option.
(c) OPTION PRICE. Each Option Agreement shall
state the Option Price, which shall be not less than one
hundred percent (100%) of the Fair Market Value of the
shares of Common Stock of the Corporation on the date of
grant of the Option. The Option Price shall be subject to
adjustment as provided in Section 6(i) hereof. The date on
which the Committee adopts a resolution expressly granting
an Option shall be considered the day on which such Option
is granted, unless such resolution expressly provides for a
specific later date.
(d) MEDIUM AND TIME OF PAYMENT. The Option Price
shall be paid in full, at the time of exercise, (i) in cash,
(ii) in shares of Common Stock having a Fair Market Value
equal to such Option Price, or (iii) in a combination of
cash and shares or (iv) in the sole discretion of the
Committee, through a cashless exercise procedure involving a
broker; provided, however, that such method and time for
payment shall be permitted by and be in compliance with applicable
law.
(e) TERM AND EXERCISE OF OPTIONS. Except as
provided in Section 6(i) hereof or unless otherwise determined
by the Committee, the shares covered by an Option shall
become exercisable over such period, in cumulative
installments or otherwise, or upon the satisfaction of such
performance goals or other conditions, as the Committee
shall determine; provided, however, that the Committee shall
have the authority to accelerate the exercisability of all
or any portion of any outstanding Option at such time and
under such circumstances as it, in its sole discretion,
deems appropriate, and provided further, however, that such
exercise period shall not exceed ten (10) years from the
date of grant of such Option. The exercise period shall be
subject to earlier termination as provided in Sections 6(f)
and 6(g) hereof. An Option may be exercised, as to any or
all full shares of Common Stock as to which the Option has
become exercisable, by giving written notice of such
exercise to the Committee; provided, however, that an Option
may not be exercised at any one time as to fewer than 100
shares (or such number of shares as to which the Option is
then exercisable if such number of shares is less than 100).
(f) TERMINATION. Except as provided in this
Section 6(f) and in Section 6(g) hereof, an Option may not be
exercised unless the Optionee is then in the employ of the
Corporation or one of its divisions or Subsidiary
Corporations, and unless the Optionee has remained continuously
so employed since the date of grant of the Option. In
the event that the employment of an Optionee shall terminate
(other than by reason of death or Disability), all Options
of such Optionee that are exercisable at the time of such
termination may, unless earlier terminated in accordance
with their terms, be exercised within three (3) months after
-6-
================================================================
such termination, or at such later time as the Committee may
in its discretion determine, but not beyond the date on
which the Option would otherwise expire pursuant to
paragraph (e) of this Section 6; provided, however, that if
the employment of an Optionee shall terminate for Cause, all
Options theretofore granted to such Optionee shall, to the
extent not theretofore exercised, terminate forthwith.
Nothing in the Plan or in any Option granted pursuant
hereto shall confer upon an individual any right to continue
in the employ of the Corporation or any of its divisions
or Subsidiary Corporations or interfere in any way with the
right of the Corporation or any such division or Subsidiary
Corporation to terminate such employment.
(g) DEATH OR DISABILITY OF OPTIONEE. If an
Optionee shall die while employed by the Corporation or a
Subsidiary Corporation or within three (3) months after the
termination of such Optionee's employment, other than for
Cause, or if the Optionee's employment shall terminate by
reason of Disability, all Options theretofore granted to
such Optionee (to the extent otherwise exercisable) may,
unless earlier terminated in accordance with their terms, be
exercised by the Optionee or by the Optionee's estate or by
a person who acquired the right to exercise such Option by
bequest or inheritance or otherwise by reason of the death
or Disability of the Optionee, at any time within one year
after the date of death or termination by reason of
Disability or at such later time as the Committee may in its
discretion determine, but not beyond the date on which the
Option would otherwise expire pursuant to paragraph (e) of
this Section 6.
(h) NONTRANSFERABILITY OF OPTIONS. Options
granted under the Plan shall not be transferable otherwise
than by will or by the laws of descent and distribution, and
Options may be exercised, during the lifetime of the
Optionee, only by the Optionee or by his guardian or legal
representative.
(i) EFFECT OF CERTAIN CHANGES. (1) If there
is any change in the shares of Common Stock through the
declaration of stock dividends, distributions made with
respect to shares of Common Stock, recapitalizations,
restructurings, stock splits, or combinations or exchanges
of such shares, or the like, then the number of shares of
Common Stock or other securities available for Options, the
kind and amount of shares and other securities covered by
outstanding Options, and/or the Option Price, as
appropriate, shall be adjusted as necessary to reflect
equitably such change in the shares of Common Stock;
provided, however, that any fractional shares resulting from
such adjustment shall be eliminated.
-7-
================================================================
(2) If while unexercised Options remain
outstanding under the Plan--
(A) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act),
other than the Corporation, Merrill Lynch Capital
Partners and affiliates, any person who on the
date hereof is a director or officer of the
Corporation, any trustee or other fiduciary
holding securities under an employee benefit plan
of the Corporation, or any corporation owned,
directly or indirectly, by the stockholders of the
Corporation in substantially the same proportions
as their ownership of stock of the Corporation, is
or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Corporation
representing 20% or more of the combined voting
power of the Corporation's then outstanding
securities;
(B) during any period of two
consecutive years, individuals who at the
beginning of such period constitute the Board, and
any new director (other than a director designated
by a person who has entered into an agreement with
the Corporation to effect a transaction described
in clause (A) or (C) of this Section 7(i)(2))
whose election by the Board or nomination for
election by the Corporation's stockholders was
approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were
directors at the beginning of the period or whose
election or nomination for election was previously
so approved, cease for any reason to constitute at
least a majority thereof; or
(C) the stockholders of the Corporation
approve a merger or consolidation of the
Corporation with any other entity other than a merger
or consolidation which would result in the voting
securities of the Corporation outstanding immediately
prior thereto continuing to represent (either by
remaining outstanding or by being converted into
voting securities of the surviving entity) more than
80% of the combined voting power of the voting
securities of the Corporation or such surviving
entity outstanding immediately after such merger
or consolidation, or the stockholders of the
Corporation approve a plan of complete liquidation
of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially
all of the Corporation's assets
(each, an "Acceleration Event"), then all Options not
theretofore exercisable by their terms shall become
exercisable in full. Following the Acceleration Event, except
with respect to Options held for less than six months prior
to such event by Optionees who are Executive Officers, the
Committee shall provide for the cancellation of all Options
then outstanding; provided, however, that, for purposes of
-8-
=====================================================================
such cancellation, the Committee may limit the definition of
Acceleration Event as necessary to comply with the
conditions and requirements of Rule 16b-3. Upon such
cancellation, the Corporation shall make, in exchange
therefor, a cash payment for any such Option in an amount
per share equal to the difference between the per share
exercise price of such Option and the Fair Market Value of a
share of Common Stock on the date during the prior sixty-day
period that produces the highest Fair Market Value.
(3) In the event of a change in the Common
Stock of the Corporation as presently constituted which is
limited to a change of all of its authorized shares with par
value into the same number of shares with a different par
value or without par value, the shares resulting from any
such change shall be deemed to be the Common Stock within
the meaning of the Plan.
(4) The foregoing adjustments shall be made
by the Committee, whose determination in that respect shall
be final, binding and conclusive.
(5) Except as hereinbefore expressly provided
in this Section 6(i), the Optionee shall have no rights by
reason of any subdivision or consolidation of shares of
stock of any class or the payment of any stock dividend or
any other increase or decrease in the number of shares of
stock of any class or by reason of any dissolution,
liquidation, merger, or consolidation or spin-off of assets
or stock of another corporation; and any issue by the
Corporation of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not
affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common
Stock subject to the Option. The grant of an Option
pursuant to the Plan shall not affect in any way the right
or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital
or business structures or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or part of its
business or assets.
(j) RIGHTS AS A STOCKHOLDER. An Optionee or a
transferee of an Option shall have no rights as a stockholder
with respect to any shares covered by the Option
until the date of the issuance of a stock certificate for
such shares. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or
other property) or distribution of other rights for which
the record date is prior to the date such stock certificate
is issued, except as provided in Section 6(i) hereof.
(k) OTHER PROVISIONS. The Option Agreements
authorized under the Plan shall contain such other provisions,
including without limitation the imposition of
restrictions upon the exercise of an Option, as the
Committee shall deem advisable.
-9-
===============================================================
7. Terms and Conditions of Restricted Stock Awards and
-------------------------------------------------------
Restricted Unit Awards.
- ----------------------
Each Restricted Stock Award and Restricted Unit Award
granted under the Plan shall be evidenced by a written
Restricted Award Agreement between the Corporation and the
Grantee, which agreement shall comply with, and be subject
to, the following terms and conditions (and with such other
terms and conditions not inconsistent with the terms of this
Plan as the Committee, in its discretion, shall establish):
(a) NUMBER OF SHARES AND UNITS. The Committee shall
determine the number of Restricted Shares to be awarded to a
Grantee pursuant to the Restricted Stock Award and the
number of Restricted Units to be awarded to a Grantee
pursuant to a Restricted Unit Award.
(b) NONTRANSFERABILITY. Except as set forth in
subsections (f) and (g) of this Section 7, a Grantee may not
sell, assign, transfer, pledge, hypothecate or otherwise
dispose of any Restricted Shares or Restricted Units awarded
to said Grantee under this Plan, or any interest therein,
except by will or the laws of descent and distribution, for
a period of five years, or such shorter period as the
Committee shall determine, from the date on which the award is
granted. The Committee may also in its discretion impose
such other restrictions and conditions on Restricted Shares
and Units awarded as it deems appropriate. In determining
the Restricted Period of an award, the Committee may provide
that the restrictions shall lapse with respect to specified
percentages of the awarded shares or units on successive
anniversaries of the date of such award or upon the
satisfaction of such other conditions as the Committee may
impose. In no event shall the Restricted Period end with
respect to a Restricted Stock Award or Restricted Unit Award
prior to the satisfaction by the Grantee of any liability
arising under Section 8 hereof. Any attempt to dispose of
any Restricted Shares in contravention of any such
restrictions shall be null and void and without effect. The
period during which such restrictions on transfer, and such
other restrictions as the Committee may impose, are in
effect is referred to as the "Restricted Period".
(c) CERTIFICATES REPRESENTING RESTRICTED SHARES. The
Corporation shall not be required to issue stock
certificates representing Restricted Shares awarded to a
Grantee until the Restricted Period related to such shares
has lapsed. If any stock certificates representing
Restricted Shares awarded pursuant to a Restricted Stock
Award are issued prior to the lapse of the Restricted
Period, such stock certificate shall bear an appropriate
legend referring to such restrictions. Such certificates
may be retained by the Corporation during the Restricted
Period.
-10-
===============================================================
(d) TERMINATION. If the Grantee's continuous
employment with the Corporation or any of its divisions or
Subsidiary Corporations shall terminate for any reason prior
to the expiration of the Restricted Period applicable to any
Restricted Shares or Restricted Units granted to such
Grantee, or prior to the satisfaction of any other conditions
established by the Committee applicable to such Grant,
any such Restricted Shares or Restricted Units then remaining
subject to restrictions (after taking into account the
provisions of subsections (f) and (g) of this Section 7)
shall thereupon be forfeited by the Grantee and any such
Restricted Shares shall be transferred to, and reacquired
by, the Corporation or its Subsidiary Corporation at no cost
to the Corporation or the Subsidiary Corporation. In such
event, the Grantee, or in the event of his death, his
personal representative, shall, with respect to any such
shares, forthwith deliver to the Secretary of the Corporation
any stock certificates in the possession of the Grantee
or the Grantee's representative representing the Restricted
Shares remaining subject to such restrictions, accompanied
by such instruments of transfer, if any, as may reasonably
be required by the Secretary of the Corporation.
(e) RIGHTS AS A STOCKHOLDER. Upon receipt by a
Grantee of a Restricted Stock Award, the Grantee shall
possess all incidents of ownership of the Restricted Shares
(subject to subsection (b) of this Section 7), including the
right to receive or reinvest dividends with respect to such
shares and to vote such shares.
(f) EFFECT OF CERTAIN CHANGES. The number of
Restricted Shares or Restricted Units subject to a Grant
shall be appropriately adjusted by the Committee in the
event of any change in the shares of Common Stock set forth
in Section 6(i)(1). Upon the occurrence of an Acceleration
Event, as defined in Section 6(i)(2), all restrictions then
outstanding with respect to a Restricted Stock Award and
Restricted Unit Award shall automatically expire and be of
no further force and effect.
(g) OTHER PROVISIONS. The Committee shall have the
authority (and the Restricted Award Agreement may so
provide) to cancel all or any portion of any outstanding
restrictions and conditions prior to the expiration of the
Restricted Period with respect to all or part of a
Restricted Stock Award or Restricted Unit Award on such terms
and conditions as the Committee may deem appropriate. The
Restricted Award Agreements authorized under this Plan shall
contain such other provisions not inconsistent with the
terms hereof as the Committee shall deem advisable.
-11-
=================================================================
8. Agreement by Grantee Regarding Withholding Taxes.
------------------------------------------------
When a Grantee or other person becomes entitled to
receive shares of Common Stock pursuant to the exercise of an
Option or upon the lapse of restrictions relating to a
Restricted Stock Award, or to receive a cash payment with
respect to a Restricted Unit Award upon the lapse of
restrictions relating thereto, the Corporation shall have
the right to require the Grantee or such other person to pay
to the Corporation, or to withhold from any cash payment
required to be made with respect to a Restricted Unit Award,
the amount of any taxes that the Corporation may be required
to withhold before delivery to such Grantee or other person
of a certificate or certificates representing such shares,
or the delivery to such Grantee of a payment with respect to
Restricted Units.
Unless otherwise prohibited by the Committee or by
applicable law, a Grantee may satisfy any such withholding
tax obligation by any of the following methods, or by a
combination of such methods: (a) tendering a cash payment;
(b) authorizing the Corporation to withhold from the shares
of Common Stock otherwise issuable to such Grantee (or, in
the case of a Restricted Stock Award, from the shares with
respect to which the restrictions shall have lapsed) shares
having an aggregate Fair Market Value, determined as of the
date the withholding tax obligation arises, less than or
equal to the amount of the total withholding tax obligation
or, at the discretion of the Committee, up to the total tax
liability of the Grantee or other person calculated at the
maximum combined marginal federal, state and local tax rates
applicable to the Grantee or other person (the "Maximum
Liability"); (c) delivering to the Corporation previously
acquired shares of Common Stock (none of which shares may be
subject to any claim, lien, security interest, community
property right or other right of spouses or present or
former family members, pledge, option, voting agreement or
other restriction or encumbrance of any nature whatsoever)
having an aggregate Fair Market Value, determined as of the
date the withholding tax obligation arises, less than or
equal to the amount of the total withholding tax obligation
or, at the discretion of the Committee, up to the Maximum
Liability; or (d) authorizing the Committee to withhold from
the payment of a Restricted Stock Unit with respect to which
the Restricted Period has lapsed an amount less than or
equal to the amount of the total withholding tax obligation
or, at the discretion of the Committee, up to the Maximum
Liability. A Grantee's election to pay his or her withholding
tax obligation or all or part of the Maximum Liability
(in whole or in part) by the method described in clause (b)
hereof is irrevocable once it is made, may be disapproved by
the Committee and, if made by any Executive Officer, must be
made (x) only during the period beginning on the third business
day following the date of release of the Corporation's
quarterly or annual summary statement of sales and earnings
and ending on the twelfth business day following the date of
such release or (y) not less than six months prior to the
date such Grantee's withholding tax obligation arises.
-12-
====================================================================
9. Term of Plan.
-------------
The term of this Plan is ten (10) years from the date
the Plan was originally adopted by the Board, or the date
the Plan is approved by the stockholders of the Corporation,
whichever is earlier. No Option, Restricted Stock Award or
Restricted Unit Award shall be granted pursuant to this Plan
later than January 31, 2002, but Options and Restricted
Stock and Unit Awards theretofore granted may extend beyond
that date in accordance with their terms.
10. Amendment and Termination of the Plan.
-------------------------------------
The Board may, at any time and from time to time,
suspend, terminate, modify or amend the Plan; provided,
however, that any amendment that would materially increase
the aggregate number of shares of Common Stock as to which
Options or Restricted Stock Awards may be granted under the
Plan, materially increase the benefits accruing to participants
under the Plan, or materially modify the requirements
as to eligibility for participation in the Plan, each within
the meaning of Rule 16b-3, and, in the sole discretion of
the Committee, any amendment that requires shareholder
approval in order for the Plan to comply with Section 162(m)
of the Code, shall be subject to the approval of the holders
of a majority of the Common Stock present and entitled to
vote at a duly held meeting of the shareholders of the
Corporation, except that any such increase or modification
that may result from adjustments authorized by Section 6(i)
hereof shall not require such approval. Except as provided
in Section 6 hereof, no suspension, termination, modification
or amendment of the Plan may adversely affect any Grant
previously made, unless the written consent of the Grantee
is obtained.
11. Approval of Stockholders.
------------------------
The Plan shall take effect upon its adoption by the
Board of Directors but shall be subject to the approval of
the holders of a majority of the issued and outstanding
shares of Common Stock of the Corporation, which approval
must occur within twelve months after the date the Plan is
adopted by the Board.
-13-
=================================================================
12. Miscellaneous.
--------------
(a) Effect of Headings. The section and
--------------------
subsection headings contained herein are for convenience only
and shall not affect the construction hereof.
(b) Compliance with Legal Requirements. The Plan
-----------------------------------
and the other obligations of the Corporation under the Plan
and any agreement shall be subject to all applicable federal
and state laws, rules and regulations, and to such approvals
by any regulatory or governmental agency as may be required.
The Corporation, in its discretion, may postpone the
issuance or delivery of Common Stock under any Grant as the
Corporation may consider appropriate, and may require any
Grantee to make such representations and furnish such
information as it may consider appropriate in connection
with the issuance or delivery of Common Stock in compliance
with applicable laws, rules and regulations.
(c) No Right To Continued Employment. Nothing in
---------------------------------
the Plan or in any agreement entered into pursuant hereto
shall confer upon any Grantee the right to continue in the
employ of the Corporation or any of its divisions or
Subsidiary Corporations, to be entitled to any remuneration
or benefits not set forth in the Plan or such agreement or
to interfere with or limit in any way the right of the
Corporation or such division or Subsidiary Corporation to
terminate such Grantee's employment.
(d) Grantee Rights. No Grantee shall have any
---------------
claim to be made any Grant under the Plan, and there is no
obligation for uniformity of treatment for Grantees. Except
as provided specifically herein, a Grantee or a transferee
of a Grant shall have no rights as a stockholder with
respect to any shares covered by any Grant until the date of
the issuance of a stock certificate for such shares.
(e) Beneficiary. A Grantee may file with the
-----------
Committee a written designation of a beneficiary on such form
as may be prescribed by the Committee and may, from time to
time, amend or revoke such designation. If no designated
beneficiary survives the Grantee, the executor or
administrator of the Grantee's estate shall be deemed to be
the Grantee's beneficiary.
(f) Interpretation. The Plan is designed and
---------------
intended to comply with Rule 16b-3 promulgated under the
Exchange Act and, to the extent applicable, with Section
162(m) of the Code, and all provisions hereof shall be
construed in a manner to so comply.
-14-